Co issues upside guidance for Q1 (Apr), sees Q1 (Apr) revs of $94 bln vs. $92.44 bln First Call consensus. Sales strength continued in flat-panel TVs, with additional strong performance in April for video games and gaming systems. Sales were higher in food, dry grocery and consumables, while the allergy season helped drive sales of prescription and over-the-counter medications.

End of the OptimismBy Rev SharkRealMoney.com Contributor5/8/2008 8:42 AM EDT

The temptation to form premature theories upon insufficient data is the bane of our profession. -- Sherlock Holmes

For a couple of months now, the market has been enjoying a rally based on the theory that "the worst is over." We have had some better-than-expected earnings reports, and economic data have not been quite as bad as expected, either. Based on the fact that our worst fears are not being realized, many market players have been quick to believe that the debt crisis, housing disaster and a slowing economy have already been priced in and fully discounted by the market.

The optimistic view of a quick end to the bulk of our troubles and woes is certainly an appealing idea. Unfortunately, this is exactly the overly hopeful thinking than almost always prevails during bear markets. If you look back at the bear market of 2000 to 2003, you will see at least three rallies of greater magnitude than what we have recently enjoyed. During each of those rallies, there was widely held hope that the worst was over and fully priced in. Ultimately, the real pain of the bear market came when that proved wrong and another leg down began.

Our recent rally has all the hallmarks of premature and dangerous belief that the worst is over. Sentiment has jumped dramatically, and there is downright complacency in many cases. What is interesting is that this comes in the face of skyrocketing oil prices and increased concerns that inflationary pressures are growing.

My concern about another potential leg down is also supported by the technical setups that have developed. The formation off the March lows in all the major indices is a "bearish wedge." That is basically a steady, low-volume rise with little underlying support. The danger in this action is that once the uptrend is broken, the selling can intensify quickly because there isn't good underlying support. What is particularly troubling about the pattern is the consistently low volume. We have not had the sort of institutional buying and accumulation that signals that big money is coming back into the market and will support it.

Given this precarious technical setup, along with the end of earnings season, the start of weak summer seasonality, too much complacency and few potential positive news catalysts, I'm being extremely cautious. I am quite concerned that we are now on the cusp of another leg down.

My style of investing is to not be overly anticipatory, but to react as events unfold. The weakness yesterday was sufficient to cause me to add to indices shorts and to start to watch for the opportunity to add to short-side trades. The bulls have been doing a pretty good job for a couple of months now, but I believe too many people are believing hopefully that the bear market has come to an end.

We have some minor strength to start the day, as same-store sales from Wal-Mart (WMT) looks pretty good. Overseas markets were weak and the ECB is leaving interest rates unchanged, which is helping the dollar. -----------------------------Ülespoole avanevad: